CSA Index: Stock Market Is Still A Long-Term Investment Choice

Illustration. (Photo: Doc. Antara)

JAKARTA - Capital Sensitivity Analysis Index or CSA Index says the stock market is still an option for long-term investment even though it has the potential to experience corrections in the short term.

Market participants are still optimistic about the performance of the Composite Stock Price Index (JCI) and are targeting to strengthen to the level of 7,727 over the next 12 months or strengthen by 6.81 percent compared to the closing position at the end of April 2024.

"For the next 12 months, CSA Index in May 2024 will record a figure of 94.6, where this result shows an increase from the previous level in the range of 92.1," said Chairman of the Indonesian Stock Analyst Association (AAEI) David Sutyanto as CSA Index research in Jakarta, quoted from Antara, Monday, May 6.

David explained that market participants still believe that the Indonesian capital market has great potential, along with the increase in the performance of issuers during the first quarter of 2024.

In addition, along with the Fed's attitude, which still maintains the benchmark interest rate and gives a signal that interest rates will not happen again, and a decrease will be made when the inflation target has been achieved.

"The election results (elections) have been completed, as well as eliminating political uncertainty that has colored during the first quarter of 2024," said David.

However, in the short term, market participants are targeting the JCI to move negatively down 1.85 percent in the range of 7,100 in May 2024, as monetary sentiment is still tight and the rupiah weakening continues.

He explained that the CSA Index for May 2022 was 51.4 or weakened from April 2024 which was 65.8, which was the lowest CSA Index result since early 2024.

"This indicates that market participants are at the lowest level and tend to be less optimistic about the JCI's performance in May 2024," said David.

David explained that his party is observing the sectors that will be the main drivers of the JCI in May 2024, including the energy sector for the first time being the main choice for market players to replace the financial sector.

"Uncertainty in monetary policy and the potential for strengthening energy commodity prices are the main drivers of the positive performance of this sector," said David.

The CSA Institute is a Competency-based Training Institute that focuses on analyst competence and covers certification such as Certified Securities Analyst (CSA), Certified Technical Analyst (CTA), Certified Improved Income Analyst (CFIA) and other programs related to the financial services industry.